The Dynamic Simulation Analysis of the Impact of Urbanization and Globalization on Environmental Quality

Abstract

This study aims to analyze the effect of urban population and economic globalization on air quality in Turkey for the period 1970–2017, including GDP and electricity consumption as control variables. This paper is the first attempt to apply the dynamic autoregressive-distributed lag (DARDL) approach to explore the association between carbon emissions, urbanization, economic globalization, GDP, and electricity consumption in Turkey. The analysis results suggested the existence of a cointegration relationship between all series in the long run. DARDL results revealed that while urbanization has a statistically significant effect on carbon emissions in the short or long run, economic globalization has a positive impact in the long run. That is, economic globalization increases carbon emissions by about 0.15 percent. Thus, it can be said that globalization is more critical than urbanization in terms of environmental costs. In addition, it was determined that GDP and electricity consumption increase carbon emissions in both the long and short run. Also, the response of CO2 emissions to all shocks in the explanatories was determined. All future shocks of electricity consumption lead to no change in CO2 emissions. The negative shocks of both urbanization and globalization decrease CO2 emissions in the short run, but the response of CO2 is stable in the long run. The effects of a shock in GDP are exactly the opposite.